A bank's earnings performance has an effect on its long-term survivability. Earnings may be retained by the bank, giving a boost to its capital cushion, or be used to deal with problematic loans, potentially making the bank better able to withstand economic shocks. Obviously, banks that are losing money are less able to do those things.
Audubon State Bank scored 14 out of a possible 30 on Bankrate's earnings test, failing to reach the national average of 16.52.
Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one key measure of a bank's earnings. The most recent annualized quarterly return on equity for Audubon State Bank was 7.23 percent, below the national average of 9.28 percent.
For the twelve months ended June 30, 2017, the bank recorded net income of $420,000 on total equity of $12.6 million. The bank had an annualized return on average assets, or ROA, of 0.78 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 percent.